How is an increase in revenues budget recorded?

The correct answer reflects how governmental accounting treats the recording of budgetary changes, specifically an increase in revenues. When a governmental entity anticipates an increase in revenues, it must recognize that change through its budgetary accounts.

In this context, the first part of the entry shows a debit to Estimated Revenue Control. This account represents the anticipated revenues that the government expects to collect during the budget period. By debiting this account, the government is recognizing an increase in expected revenue, which effectively raises its budgeted revenue estimate.

The second part of the entry debits the Budgetary Fund Balance. This action recognizes that there is now an increased capacity for the entity to use these funds, since the anticipated revenues have increased. This reflects the idea that the budgetary balance remains in sync with the revenues and expenditures being estimated and recorded.

Thus, this accounting treatment ensures that both the expected revenues and available financial resources in the budget are accurately stated, supporting sound fiscal management and compliance with budgeting principles in governmental accounting.